Australia - High Levels of Urbanization

The Australian Federation is characterized by a small number of states, each dominated by a single very large urban conglomeration. In particular, the state of New South Wales is highly urbanized along the coast and in the area around Sydney.

In an Australian Productivity Commission Roundtable on sustainable population held at old Parliament House in 2011, Graeme Hugo from the University of Adelaide broadened the debate from a consideration of how many people could live in the country to where those people should live and addressed the question "Is decentralisation the answer?". The question was prompted by the unique patterns of population in Australia.
Hugo said:
"Australia also has one of the most spatially concentrated populations of any nation. This pattern of concentration has a number of dimensions (Hugo 2003):

87 per cent live in urban areas.

64 per cent live in capital cities.

81 per cent live within 50 kilometres of the coast.

0.8 per cent live in the 70.5 per cent of the land area of the continent with a population density of less than 0.1 people per square kilometre.

76 per cent live in the 0.33 per cent of the land area within 100 people or more per square kilometre."

In answer to the question of decentralisation, Hugo said:

"The answer is that we don’t know. However, a policy of regional development based on a sound understanding of the economic and environmental potential of regional areas may be one of the ways Australia can move towards a more sustainable future."

While the basic population patterns have not changed for some time, there is reason to suggest that high levels of urbanisation is continuing.

The Foundation for Regional Development Limited undertakes
analysis of population growth in regional NSW.
The most recent report tracks a decline in
the population in many regional communities.
This report gained some media attention in the Sydney Morning Herald (Sunday
18 May 2014 p30) where the Foundation chief executive stated that growth in
Western Sydney was putting more money into that area, money that would “normally
have gone to the regions”.

What are Australian Governments doing to address the issue?

In 2002 at the 11th Biennial Conference of the Australian Population Association in Sydney, Paul Collits, Manager Regional Policy NSW Department of State and Regional Development summarized the governance issues in play in a useful paper Australian Regional Policy and Its Critics. Little has changed since the paper, which remains a significant contribution to understanding the political processes involved.

Collits said:
"Policy development and policy change are complex processes with multiple dimensions and explanations. In Australia, with its three tiered system of government, short term 6 electoral cycles, spatially differentiated electorates, vigorous political debates, varying geography and widely (and increasingly) divergent regional issues, it is not surprising that regional policy would be subject to shifts in emphasis, changing levels of resources, and the comings and goings of intellectual fashions. Regional policy is also, of course, hostage to many other areas of policy which inevitably have varying and often unforeseen impacts on regions."

The scope and impact of regional policy has varied from time to time. In the mid 1970's the NSW Government made a concerted effort to create new regional cities, purchasing and managing large areas around a number of targeted rural centers to prevent land speculation. When this program stalled, subsequent Governments moved to different measures including the movement of state infrastructure and employees to some regional centers. Today the measures include an incentive for city dwellers to buy a
home in the bush ($7,000). This particular measure is not well known - reportedly only assisting 3,466 homeowners at a cost of $24 million.

Collits identified the cyclical nature of this change:
"...there have been two processes occurring in Australian regional policy. The first is essentially a political process. Interest in regional policy has waxed and waned over time, especially in Canberra. Generally, Coalition governments have tended (1949, 1976, 1996) to view regional policy as the proper preserve of the States, and have wound back inherited regional programs. On the other hand, in the States, the process has been more evenly evolutionary and bipartisan, though, on occasions, there have been more dramatic overturnings (Greiner in 1989)."

Throughout, the political and financial imbalance that arises as between urban and regional areas has been a constant source of
concern. Since early in the history of federation there have been proposals to split New South Wales
into smaller governing units. In 1953, 21 NSW councils held an unofficial referendum on the issue and gained overwhelming
support for the creation of a new state.
The Northern Separation Movement (more recently called the New England
New State movement) eventually forced a referendum on the creation of a new
state in New England area – which was narrowly defeated in 1967 (reportedly after moves to include large urban areas in the electoral area to
maximise the possibility of defeat).

Commission of Audit - 2014

Political discontent with the fair distribution of political
and economic power within the states has gradually seen the Commonwealth
government move to providing direct funding to regional areas. This trend has been challenged by the Commission
of Audit which has re-emphasised the separation of powers between the Commonwealth
and State Governments.

The Commission said:

“Governments should also operate at their natural
levels. Policy oversight for national issues should go to the Commonwealth with
responsibility for regional and local issues predominantly going to State and
Territory governments.

Under the principle of sovereignty, as far as
practicable, each level of government should be sovereign in its own sphere.”

In addition, the Commission recommended the removal of a number
of Commonwealth programs which it thought did not meet this delimitation. The removal of these programs, with no concomitant
guarantee by states to maintain funding in like areas may create additional
interest in re-examining the existing political structure of states.

Support now exists to assist young long-term
unemployed people to move. Based on existing policies, relocation assistance of
$6,000 is available if an unemployed person moves to a regional area to take up
a job or $3,000 if they move to a metropolitan area. A Job Commitment Bonus of
$2,500, and up to $4,000, is available for people who, having found a job,
remain off welfare for a sustained period of time.

Tourism initiatives and management

Approximately $185 million of Commonwealth funding is
directed towards tourism initiatives and management. Most of this funding is
for Tourism Australia, although other programmes now administered by Austrade
include ‘Tourism Quality’ grants and the Tourism Industry Regional Development
Fund. The Department of Foreign Affairs and Trade is responsible for tourism
policy.

Nearly two thirds of Tourism Australia’s budget is
directed to advertising and other promotional activities. While tourism is one
of Australia's main exports, most of the benefits of tourism accrue to the
tourism operators. There is no clear reason why significant funding should be
provided to tourism above other Australian export industries.

The States already provide a marketing budget for
tourism. However, it is arguable that marketing Australia as a destination for
international tourists should be undertaken at a Commonwealth level rather than
on a State-by-State level. The Commission proposes that grant funding for the
tourism industry be ceased, and funding for Tourism Australia be reduced by 50
per cent, to focus on international marketing, with the function incorporated
into a commercial arm of the Department of Foreign Affairs and Trade.

Tourism
Industry Regional Development Fund

The Tourism Industry
Regional Development Fund programme supports investment in
tourism-related accommodation, infrastructure, experience and facilities. The
aim of this programme is to attract tourists to regional areas and encourage
them to stay for longer, and in doing so provide jobs, investment and growth in
regional Australia.

Most of the benefits accrue to
tourism operators.

The continued funding of this grants programme should
cease, consistent with the Commission's recommendation in its Phase One Report
to limit industry assistance to areas of genuine market failure.

Support for Regional Universities

Cooperative Research Centres should be abolished,
with funding rolled into the Australian Research Council Linkages programme. As
part of this transition, consideration should be given to allowing longer
funding periods for Australian Research Council grants. The Collaborative
Research Network programme — which provides funding for larger universities to
collaborate with smaller, less research-intensive and regional universities —
should also be abolished, allowing researchers to determine their own
collaboration priorities.

Infrastructure
and Regional Development

There are 55 Regional Development Australia
committees within the Department of Infrastructure and Regional Development.
Regional Development Committees are funded by State, Territory and local
governments in some jurisdictions.

The Commonwealth appropriates approximately $20
million for these committees, an average $360,000 each. These committees
develop regional plans, help to identify solutions that address the region’s
needs and hold regional forums.

For example, in 2012-13 Regional Development Australia
Barossa engaged in activities such as: improving digital literacy for business,
establishing a digital cluster for start up creatives, roundtables to discuss
the potential of live music in the region, a region cycle route mapping project
and assisting people with their resumes and job applications.

Consistent with the subsidiarity principle and the
Commission’s Principles of Good

Government, the Commonwealth is not best placed to meet the
needs of specific regions. Accordingly, the Commission recommends that the
Commonwealth withdraw its involvement in these committees and transfer
responsibility to State and local governments recognising that they are better
placed to address region-specific issues.

Relocation scholarships

These payments provide income support for young
people who are unable to work full time as they are studying. There is scope to
change some of the payments’ eligibility to better target this assistance.

Currently, Relocation Scholarships are available to
dependent Youth Allowance recipients who move away from the family home to
study. The scholarships provide a minimum of $4,145 in the first year and
$1,036 in subsequent years of study to all eligible students, with a higher
rate of $2,073 provided to students moving from regional or remote areas in
their second and third years of study. The scholarships are automatically provided
to all eligible students and are provided to students moving within capital
cities.

In addition to Relocation Scholarships, all students
receiving Youth Allowance also receive Student Start-up Scholarships of $2,050.
Legislation is currently before Parliament to convert Student Start-up
Scholarships to an income-contingent loan, to be paid back after any Higher
Education Loan Programme debt is fully repaid.

Assistance with the costs of relocating may be important in
enabling some young people to participate in education. However, this
assistance could be better targeted. It is recommended that Relocation
Scholarships be converted into a voluntary income-contingent loan, similar to
the Student-Start-up Scholarships. This would require students to decide if
they really needed this assistance. The Commission recommends that the
relocation loans be limited to the first year of relocation, and that they no
longer be provided to students moving within their home capital city.

Seatbelts on
Regional School Buses

The Seatbelts on
Regional School Buses ($3 million over 4 years from 2013-14)
programme provides funding for eligible school bus operators to subsidise the
installation of seatbelts on new buses or retrofit existing buses. The
programme aims to increase the number of seatbelt-equipped school buses
operating on high speed roads in rural and regional areas.

Accountability of government spending would be enhanced if
these and other tied Commonwealth grants ceased, and to the extent that
programmes are identified as priorities, local or State governments provide
them to the communities they serve.

Recommendation
22: Payments to local government

The Commission’s Phase
One recommendations on addressing the degree of vertical fiscal imbalance
within the Federation propose that the States have access to the personal
income tax system so they are in a better position to fund their own
priorities. This will include support for local government. In this situation,
the need for separate tied funding from the Commonwealth will diminish.

The Commission
recommends that tied grants to local governments cease, and to the extent that
programmes are identified as priorities, local or State governments provide
them to the communities they serve.

Peter Quinton

Palerang

May 2014

[A note on spelling in this paper. Increasingly, I have departed from ordinary Australian spelling conventions to ensure that the entirety of the text can be automatically translated. Those who know how much I detest spelling, will understand how few tears I have shed over this.]
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